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2. Some national legal responses

As one authority described them, the national responses to climate change have been a mile wide and an inch deep (Mark Trexler, quoted in Anonymous, 1998). Parties to the UNFCCC have produced detailed reports on their activities. In many cases, however, the reports do not reflect activities initiated through new legislation. Rather, the reports describe ongoing efforts that incidentally may have beneficial effects on climate change. In some nations, the most striking new initiative is simply the effort to produce the report itself.

Recent forest legislation in several countries has endorsed the use of forests as greenhouse gas sinks or declared a policy of forest-based mitigation. For example, Article 1 of the 1998 Forest Law of China includes adjusting the climate as a goal of the law. Article 1 of France’s Loi d’orientation sur la forêt (2001) declares that forest policy is a factor in fighting the greenhouse effect, and Article 7 encourages greater use of wood-based materials and fuels towards that end. The 1996 Ley Forestal of Guatemala notes fixation of carbon as one of the benefits that forests provide. Article 7 of Mexico’s Ley General de Desarrollo Forestal Sustentable (2003) includes capture of carbon among the environmental services that forests provide, and Article 33 includes carbon fixing as one of the factors that forest policy should promote.

Nevertheless, to date few national laws have changed existing legal frameworks or introduced new mechanisms to encourage forest-based greenhouse gas mitigation. Some general forestry laws may have mitigation as an incidental purpose, but may result in activities indistinguishable from forestry carried out in traditional programmes. Some nations may have nothing in law that mentions forests as greenhouse gas sinks, but they can and do claim credit for business-as-usual forest-related carbon sequestration, which is carried out under laws and institutions that predate the UNFCCC.

United States of America

The United States of America offers an example of a national response that has focused more on policy than legislative change in the area of forests. The 2002 National Communication to the UNFCCC Secretariat (United States Department of State, 2002) describes a number of federal programmes that involve land use, forests or wood fuels. Many of these programmes pursue general conservation goals and do not have carbon sequestration as their main purpose. An example is the Conservation Reserve Program, which pays farmers to take excess lands out of production and return them to forest or other long-term conservation uses. Another example is the National Fire Plan, whose primary purpose is to reduce forest loss from catastrophic wildfires. In 2003, the United States enacted a major piece of forest legislation, the Healthy Forest Restoration Act (Public Law No. 108-148), which lists as one of its purposes to enhance carbon sequestration. However, its primary aim is to reduce the susceptibility of federal forests to catastrophic outbreaks of fire, insects and disease.

Some of the programmes have a more specific focus on climate change. For example, the departments of agriculture and energy together run a research and demonstration programme for biomass fuels. This programme predates the UNFCCC and stems from a short set of climate change and agriculture provisions called the Global Climate Change Prevention Act of 1990 (Public Law No. 101-624, title XXIV, codified at 7 US Code §§6701–6710).

A provision in a 1992 law encourages people to report voluntarily to the government any GHG reductions they create (Energy Policy Act of 1992, Public Law No. 102-486, §1605[b], codified at 42 US Code §13385[b]). The government may eventually recognize these reductions under future GHG reduction programmes. In 2001, the government’s database recorded 303 domestic and 66 international forestry projects, claiming a total sequestration of almost eight million metric tonnes of CO2 (United States Energy Information Administration, 2003).10

As is often the case in the United States, the 50 state governments have been more willing than the federal government to adopt innovative laws. (For an overview of United States state and local actions, see Kosloff and Trexler [2004].) Although some state legislatures have passed non-binding resolutions opposing the Protocol, and a few have even passed laws forbidding state officials from adopting non-voluntary GHG reduction measures before the United States ratifies the Protocol (see, for example, the Kyoto Protocol Act of 1998, 415 Illinois Compiled Statutes 140/), several have looked for ways to limit their net GHG emissions. Naturally, some of these new laws involve forests.

The state of California maintains a voluntary registry of GHG reductions achieved since 1990. In 2002, the state amended the registry law to require the registry to adopt procedures, protocols and criteria for monitoring, estimating, calculating, reporting and certifying carbon sequestration from conservation and conservation-based management of native forests, and to require the registry to refer forest owners to approved providers of advice on conservation and best management practices for native forest carbon reservoirs (2002 California Statutes ch. 423). Some other states have set up voluntary registries, as has the federal government, but California’s registry law is unusual in having specific forestry provisions.

The state of Connecticut can include conditions in its air pollution permits that require the permit holder to plant trees or turf grass to offset CO2 emissions (Connecticut General Statutes §22a-174d).

The state of Idaho, known for its agriculture, forested mountains and conservative politics, has established a Carbon Sequestration Advisory Committee. Its duties include recommending policies and programmes to promote non-industrial private forest landowner participation in carbon trading. The law creating the committee mentions the possibilities of developing emissions trading markets, encouraging creation of brokers or other trading intermediaries and production of educational materials for landowners. The law directs the chair of the committee to conduct an assessment of the carbon sequestration potential of agricultural and private-forest lands in the state. A few other states have set up such committees to look at carbon sequestration on agricultural lands, but Idaho’s law is unusual in expressly including forested lands (Idaho Code §§22-5201 to -5206).

The state of Maine, a heavily forested state with an independent political bent, has adopted a “lead-by-example initiative”. The law sets state-wide goals for GHG emission reduction, calls for participation in a regional GHG registry and mandates creation of a climate action plan that allows sequestering GHGs through sustainably managed forestry, agriculture and other natural resource activities (38 Maine Revised Statutes §§574–578).

The state of Minnesota has created a “releaf” programme “to encourage, promote and fund the planting, maintenance and improvement of trees … to reduce atmospheric carbon dioxide levels and promote energy conservation” (Minnesota Statutes §88.82). In a similar vein, the state of New Mexico has a general tree-planting programme created by a 1990 “Forest Re-Leaf Act”, whose findings speak of the benefits of sequestering carbon (New Mexico Statutes Annotated §§68-2-29 to -33).

The state of Oregon, a major producer of forest products, has empowered its State Forester to act as a broker to register and market “forestry carbon offsets” from non-federal forests.11 The State Forester is to develop a carbon offset accounting system, and the State Board of Forestry may develop rules governing creation, measurement, verification and transfer of offsets (Oregon Revised Statutes §§526.780–.789). The State Forester may manage the state-owned forests, including forests set aside to generate income for the public schools, to create marketable carbon offsets (Oregon Revised Statutes §§530.050 and .500).

Oregon has also integrated carbon sequestration into one of its reforestation efforts. The state has created a Forest Resource Trust to finance reforestation efforts on privately owned land in return for a limited interest in the income from commercial harvests (Oregon Revised Statutes §§526.700–.775). An administrative rule requires landowners using money from the trust to give the trust ownership of any carbon offsets created through the reforestation (Oregon Administrative Rules §629-022-0700[2]).

The Oregon Public Utility Commission may allow electric utilities to create offsets through small-scale tree planting on “underproducing forest land” and pass the costs on to their customers (Oregon Revised Statutes §757.266). Oregon also considers CO2 emissions in deciding whether to allow construction of new electrical power generation plants (Oregon Administrative Rules §§345-024-0500 et seq.). In a recent plant approval, the state accepted the plant owner’s payment to the Forest Resource Trust as creating a quantifiable, verifiable offset (Cathcart, 2000).

European Community

The European Community (EC) offers another example of extensive reported activity (European Community, 1998) but relatively little new legislation specifically addressed to forests. The EC stands out as a Party to the UNFCCC, being a multinational entity rather than a single nation. It has authority to adopt regulations, which are binding on its member nations. The Council of the European Union has approved the Kyoto Protocol on behalf of the Community (Council Decision of 25 April 2002).

The EC’s main legislative effort concerning forests is related to its Common Agricultural Policy (CAP). It adopted CAP in late July of 1992, not long after the UN Conference on Environment and Development where the UNFCCC was signed, but well before the EC ratified the UNFCCC in December 1993. The policy offers financial support for afforestation of agricultural land and silvicultural actions that may increase carbon sequestration. The EC also offers to share the cost of forest fire prevention projects, supports monitoring of fires and the effects of air pollution on forests, and supports general forestry research (European Community, 1998).

More recent actions include contributions to COST E21, a major European research effort on forest carbon (see ); the establishment of a Working Group on Forest Sinks within the European Climate Change Programme (ECPP), which produced a set of detailed technical recommendations for implementation (ECPP Working Group on Forest Sinks, 2002); and a proposal by the Commission for a directive amending the directive for greenhouse gas emission allowance trading within the EC, in respect of the Kyoto Protocol’s project mechanisms. The latter may affect demand for CER from forestry CDM projects.

Costa Rica

Costa Rica offers an example of a more activist approach to GHG forest mitigation legislation. Not being an Annex I nation, Costa Rica has no quantified reduction goal for GHGs under the UNFCCC. However, its political stability and reputation for environmental stewardship have made it an attractive partner for AIJ pilot projects. Costa Rica has signed bilateral agreements concerning GHG projects with the United States, Norway, Switzerland, Finland, the Netherlands and Mexico.

In 1995, Costa Rica created an Office on Joint Implementation (OCIC). OCIC came out of an agreement signed by the Ministry of Environment and Energy with two private sector groups representing industrial and financial interests and one non-governmental organization with expertise in forest protection.

In 1996, Costa Rica passed a new forestry law (No. 7575). Article 69 of the law dedicates a third of the national tax on hydrocarbons for forest conservation. This income is to compensate for the environmental services that forests provide, including mitigation of gas emissions. Article 46 of the law creates the national forest finance fund (FONAFIFO). Article 22 of the law allows FONAFIFO to issue forest landowners certificates for forest conservation (CCBs) representing payment for environmental services. The landowners can use CCBs to pay taxes and other fees owed to the government.

A 1996 executive decree set up a National Specific Fund for the Conservation and Development of Sinks and Deposits of Greenhouse Gases. Income from the sale of GHG mitigation services goes into the fund. The government spends the fund on the support of local AIJ projects.

To make the offsets more attractive to potential investors, Costa Rica has created a tradable security, known variously as a Greenhouse Gas Mitigation Certificate or a Certifiable Tradable Offset (CTO). CTOs represent specific levels of GHG reduction or mitigation, expressed as equivalent amounts of carbon removed from the atmosphere. The government has designed the CTO to be independently verifiable and to meet any technical or procedural requirements of the UNFCCC.

Costa Rica issued its first CTOs in 1997 to the Government of Norway and a consortium of private Norwegian companies. The CTOs represented credit for 200 000 metric tonnes of carbon offset through a reforestation and forest conservation project.

Costa Rica also enacted a new law on the Use, Management and Conservation of Land in 1998 (Law No. 7779). The government, in a report on UNFCCC implementation activities, pointed to this law as promoting reforestation of degraded forests and preventing degradation of existing forests (Republic of Costa Rica, 1999). However, the text of the law does not appear to speak specifically to climate change issues.


In November 1998, the state of New South Wales in Australia passed the Carbon Rights Legislation Amendment Act (No. 124). This act aims to create a tradable interest in the carbon sequestration potential of forests. It recognizes a carbon sequestration right as a form of forestry right. Forestry rights are conveyable interests in land. They may create a profit à prendre. In the case of a carbon sequestration right, this is not a right to remove natural products from the land so much as a right to claim the benefits from the carbon sequestration. The act also recognizes that a forestry covenant associated with a property may provide access to or guarantee maintenance of the forest on land subject to a carbon sequestration right. The act expressly allows the state’s Forestry Commission and electricity generators and distributors to hold and trade carbon sequestration rights.

According to Lee (2000), the state forestry agency in New South Wales has contracted with Tokyo Electric Power Company to sequester carbon in a “planted forest estate.” Planting the first year will cover 1 000 hectares, with between 10 000 and 40 000 hectares to be planted over the life of the agreement. Lee also reports that the Sydney Futures Exchange is working with the state government to develop a market for carbon credits.


Canada, with a vast forest resource, a commitment to implementing the Protocol and ten provincial governments, may become a laboratory for developing subnational legislative approaches relevant to forests. To date, however, new legislation has been limited.

Alberta has passed a Climate Change and Emissions Management Act (Statutes of Alberta 2003 ch. C-16.7). The act defines sinks to include plants and soils and declares that sink rights are property rights, but beyond that it is short on specifics. It calls for the government to adopt regulations supplying many of the details, including “the manner in which and the terms and conditions subject to which emission offsets, credits and sink rights may be created, distributed, exchanged, traded, sold, used, varied and cancelled” (Act §5[b]).

In 1998, eight provinces and the Federal Government of Canada entered into a memorandum of understanding creating a Greenhouse Gas Emission Reduction Trading (GERT) pilot project. GERT was designed to give members practical experience in emission reduction training and build the foundation for a possible future trading system. Several industry and environmental groups were also participants in the project, which is described in Bisson (2000) and on the GERT Web site (

Parties wishing credit for GHG reductions submitted proposals to GERT’s steering committee. Among other things, GERT required that GHG reductions had to be measurable and verifiable, and had to exceed any reductions mandated by law.

GERT projects included reductions in emissions as well as sinks. One of the first projects reviewed by GERT involved substituting wood waste for natural gas to power industrial boilers at a facility in British Columbia. GERT’s other forest-related project involved carbon sequestration by the province of Saskatchewan’s Ministry of Environment and Resource Management. The ministry generated credits from new white spruce plantations and from establishing a new forest reserve on land formerly available for timber harvest and traded them to SaskPower, an electric utility. GERT’s pilot project phase ended in June 2002, and it has ceased functioning as a trading exchange.

Dominican Republic

In December 1999, the Dominican Republic enacted a new forest law (Ley 118-99). Article 95, paragraph I of the law allows the national forestry agency, INAREF, to adopt regulations creating special incentives to promote the valuation of the environmental services of forests, including carbon fixation. The State will also issue negotiable reimbursement certificates to finance 80 percent of the expenses of capital and investments made in the establishment and handling of plantations and management and protection of forests. The expenses include payment of all the existing taxes.


Peru’s 2000 Ley Forestal y de Fauna Silvestre has provisions that allow the government to grant concessions for carbon sequestration. Article 2 of the law defines environmental services of forests to include those that protect soil, regulate the flow of water, conserve biodiversity, conserve ecosystems and scenic beauty, absorb carbon dioxide and maintain essential ecological processes, Article 10 of the law allows the government to grant concessions for ecotourism, conservation and environmental services, subject to regulations under the law. Presumably the holder of the concession could claim credit for any carbon sequestered.


Spain adopted a new forest plan in 2002 and a national forest law in 2003 (Ley 43/2003, 21 November, de Montes), which define domestic forest policy regarding climate change. The plan considers policy support crucial to climate change mitigation. It establishes the potential for mitigation based on available area, evaluates technical capacity for sequestration and assesses possibilities for enhancement. The law recognizes global change mitigation and wood energy as valuable functions of forests that should be enhanced. Article 65 directs public administrations to promote positive environmental benefits from forests, including carbon fixation. Public administrations may grant subsidies, conclude contracts with owners or invest directly in public lands to achieve the goals. Research on energy use from slash and adaptation of forests to climate change has also been initiated, and the law calls for a study on the adaptation of Spanish forests to climate change.

New Zealand

The Government of New Zealand agreed that some credits from afforestation and reforestation should accrue to those undertaking sink activities. However, as signatory to the Protocol, it also considers the need to meet reduction obligations as its ultimate responsibility.

Although legislation has not been introduced, the government intends to retain sink credits from all post-1990 commercial forests for the first commitment period. It also plans to accept liability for up to 10 percent of carbon losses from deforestation. Landowners who enter into contracts to manage post-1990 forests as permanent protection forests, excluding harvest, will be able to trade accumulated credits. Landowners accept the costs of participating in emission trading, e.g. monitoring, and responsibility for emissions from the forest.


In 1999, Denmark established an emissions cap and trading system for CO2 among its electric utilities (Act on CO2 quotas for electricity production, Act No. 376 of 2 June 1999). The system estimates CO2 production based on the amount of energy produced multiplied by a CO2 emission factor for the fuel used to produce the energy. The law assigns an emission factor of zero to several renewable fuels, including wood chips, fuelwood, wood pellets and wood waste. In effect, it recognizes that production of these fuels removes CO2 from the atmosphere.

The Danish act predates much of the COP work clarifying the role of LULUCF activities in flexible mechanisms. However, section 12 of the act allows the Minister of Environment and Energy to issue guidelines integrating the Danish system into an international emissions trading system.

10 For a more detailed discussion of United States actions, see Hayes and Gertler (2002) and Justus and Fletcher (2003).

11 The federal government owns and manages over half the land in the state, including significant forest reserves not under the State Forester’s authority.

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